Analyst Forecasts For MacroGenics, Inc. (NASDAQ:MGNX) Are Surging Higher
MacroGenics, Inc. (NASDAQ:MGNX) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's statutory forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance.
Following the upgrade, the current consensus from MacroGenics' ten analysts is for revenues of US$124m in 2023 which - if met - would reflect a sizeable 34% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 36% to US$1.99. However, before this estimates update, the consensus had been expecting revenues of US$95m and US$2.25 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
View our latest analysis for MacroGenics
There was no major change to the consensus price target of US$10.60, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on MacroGenics, with the most bullish analyst valuing it at US$17.00 and the most bearish at US$6.00 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how think this business will perform. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.
Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that MacroGenics' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 26% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 6.7% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 14% annually. Not only are MacroGenics' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses next year, perhaps suggesting MacroGenics is moving incrementally towards profitability. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to next year's earnings expectations, it might be time to take another look at MacroGenics.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple MacroGenics analysts - going out to 2025, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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